If a third appraiser is needed for the Gold Star real property purchase, who selects them?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
If the purchase price of the real property is determined by appraisal, the two appraisals will be averaged to determine the purchase price; provided, however, that if the two appraisals differ by more than 10%, then, unless the COMPANY and FRANCHISEE agree in writing to a purchase price within 30 days after receipt of the second appraisal, the two appraisers will select a mutually agreeable third appraiser who will solely determine the purchase price.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, in the event that Gold Star exercises its option to purchase the real property of a franchise location upon termination, expiration, or closure, the determination of the purchase price may involve an appraisal process. Initially, Gold Star and the franchisee each appoint an independent appraiser. If these two appraisals differ by more than 10%, the two appraisers will then select a mutually agreeable third appraiser.
The role of this third appraiser is to solely determine the purchase price of the real property. This process is designed to ensure a fair valuation in cases where the initial appraisals diverge significantly, providing a mechanism for resolving valuation disputes.
For a prospective Gold Star franchisee, this appraisal process is important to understand. It outlines the steps that will be taken to determine the purchase price of the real property, should Gold Star decide to exercise its purchase option. The franchisee has the right to appoint their own appraiser and participate in the selection of a third appraiser, which can help protect their interests in ensuring a fair valuation. However, the final decision on the purchase price rests solely with the third appraiser, if one is needed.